How to Use This Loan Calculator
Enter your loan amount, annual interest rate, and loan term. The results update automatically as you type. Use the quick-select buttons to set common mortgage terms (5, 10, 15, 20, 25, or 30 years), or type any term directly into the field.
Frequently Asked Questions
How is a loan monthly payment calculated?
The monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments (years × 12). This ensures equal payments every month that cover both interest and a portion of the principal, leaving a zero balance at the end of the term.
How do I calculate mortgage payments?
Mortgage payments use the same amortization formula. Enter your loan amount (purchase price minus down payment), the annual interest rate from your lender, and your loan term — typically 15 or 30 years. The calculator shows your fixed monthly principal-and-interest payment. Your total monthly housing cost will also include property taxes, homeowner's insurance, and possibly PMI, which are separate from this calculation.
What is amortization?
Amortization is the process of repaying a loan through fixed, scheduled payments over time. Each payment covers accrued interest first; anything remaining reduces the principal balance. In the early years, the majority of each payment is interest. As the balance falls, the interest portion shrinks and more principal is repaid each month — until the loan is fully paid off at the final payment.
How much interest will I pay on a $200,000 loan?
Total interest depends on your rate and term. At 7% over 30 years, a $200,000 loan accrues roughly $279,018 in interest — more than the original balance. Shorten the term to 15 years and that drops to about $123,585. Use the calculator above with your exact figures to see a precise breakdown, including the year-by-year amortization summary.